Blogs

State regulators grapple with Florida Power & Light nuclear plans

With Florida Power & Light saying it expects to “pause” the project, state regulators next month will wade into a dispute about how to handle the utility's long-discussed plans to add two nuclear reactors in Miami-Dade County.

The dispute, detailed in documents filed last week at the Florida Public Service Commission, pits FPL against consumer representatives, the city of Miami and business and environmental groups.

At least in part, it involves an FPL strategy to continue pursuing a crucial license for the reactors and then pausing for what could be years before making decisions about whether to move forward with the project. The utility is asking the Public Service Commission to allow it to recoup costs from customers in the future for the licensing and other expenses.

But opponents of the request argue FPL has not submitted a needed study that would show whether the nuclear project is feasible. They say the utility should not be given approval to continue adding millions of dollars in costs and billing customers later.

In a document filed last week with the Public Service Commission, FPL said its request would effectively suspend costs that customers might otherwise have to pay next year and would temporarily eliminate the need for annual regulatory hearings on the project. FPL also is watching nuclear projects in Georgia and South Carolina as it prepares to make decisions about the planned reactors at the Turkey Point complex in Miami-Dade.

“FPL's proposal is particularly appropriate given the stage of the project: FPL is completing its licensing activities and entering a period of reduced spending while FPL `pauses' to maintain the approvals it has received and observe the progress being made, and issues being faced, at other new nuclear construction projects,” the filing said.

But opponents question whether FPL will ever build the reactors and say customers should not face the prospect of added costs.

“FPL' s position begs a basic policy question: If FPL cannot produce a feasibility analysis showing that pursuing the reactors makes economic sense for customers, why would the (Public Service) Commission saddle customers with more risk and costs?” said a document filed last week by the Southern Alliance for Clean Energy, one of the opposition groups.

The issue is rooted in a 2006 state law that was designed to encourage the development of nuclear power in Florida. That controversial law allowed utilities to incrementally collect money from customers for costly nuclear projects, rather than recouping project costs after reactors start operating.

The Public Service Commission holds hearings each year that typically involve reviewing the amounts that utilities plan to bill customers for nuclear projects and determining whether the expenses are “prudent.” The commission is scheduled Aug. 15 to start a hearing that will include FPL's request to defer recovery of costs incurred after Dec. 31, 2016.

Much of the utility's activity on the project involves trying to obtain federal approval of what is known as a “combined operating license,” a crucial step for being able to move forward with reactors. Steven Scroggs, a senior director of project development for FPL, said in testimony filed in May with the Public Service Commission that the utility had spent $260 million through 2016 pursing the combined operating license and other needed approvals.

Scroggs said in the testimony that FPL expects to incur about $25 million in expenses for the project in 2017. FPL told regulators that it thinks it will receive a combined license in late 2017 or early 2018.

If new reactors would start operating in 2031 and 2032, the overall cost of the project is estimated to range from $14.96 billion to $21.87 billion, the utility said in the filing last week.

In its request to the Public Service Commission, FPL said completing the licensing for the reactors is “eminently reasonable.”

“Possession of a valid COL (combined operating license) and associated approvals will enable FPL to move forward with preconstruction work at the right time,” the filing said. “The license may be acted upon for a period of at least 20 years once issued, providing a significant window of time during which factors influencing a decision to move to construction may change. The alternative —- halting licensing work at this time —- could permanently preclude FPL's customers from ever attaining value from the licensing investment made thus far.”

But opponents of the request, including the state Office of Public Counsel, which represents consumers, object to the utility incurring more costs. Other opponents include the Florida Retail Federation and Florida Industrial Power Users Group, along with the city of Miami and the Southern Alliance for Clean Energy.

“FPL has not satisfied, and almost certainly cannot satisfy, the statutory requirement that it prove that it has committed sufficient resources to enable its Turkey Point project to be completed, and that its alleged intent to do so is realistic or practical,” the Florida Retail Federation said in a filing last week. “FPL has not filed a realistic feasibility study for its project for more than two years, and in those intervening years, significant developments have occurred that cast serious doubt on the viability value of pursuing the COL for (the Turkey Point reactors).”